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Published on Thursday, July 2, 2009

Oakville development battle heats up

By Phinjo Gombu, Urban affairs reporter, Toronto StarThe most aggressive park development in the GTA is happening here, where Peter Gilgan, one of Canada's most prolific homebuilders, is crying foul over municipal plans to stiffly increase development charges he must pay to build in north Oakville, an area poised for explosive growth.

In some places, he might have garnered a sympathetic response, especially after writing to prospective homeowners encouraging them to complain to the people they elected. But this is one showdown he's unlikely to win.

Mattamy owner Peter Gilganlooks on happily at the startof Mulvale's 2010 mayoral run

Politicians in Oakville and Halton Region are digging in their heels, saying it's time the development industry paid its fair share of the cost of services such as roads, water pipes, new libraries and recreation centres.

"It's our feeling that (developers) made a lot of money during the good times, and they should be using some of that money to pay for the services and stop using the argument that the economy is bad," says Halton regional chair Gary Carr.

"The cost is the cost," Carr says. "If they decide not to proceed, then it is their decision not to go forward, not ours."

Carr and Oakville Mayor Rob Burton were among a group of politicians who made the idea that growth should pay for itself a major plank in their platforms in the 2006 municipal elections. They believe existing residents shouldn't have to pay for infrastructure needed because of pressures brought on by new residents.

Halton Region already has some of the highest development fees in the GTA. A proposal to be debated in July would add a further $7,888 in infrastructure costs on to the current charge of $29,074 per home. The final amount paid per house would be about $63,813, when combined with a proposed 65 per cent increase in Oakville's development charges – which will be voted on a few days before the regional vote – as well as additional charges to cover education and transit.

Gilgan, president and CEO of Mattamy Homes Ltd., says that is "indefensible" and "intolerable." The cost, he says, will inevitably be passed on to new homebuyers, affect the affordability of new homes, slow down their construction and further hurt an already battered economy.

The proposed charges are based on "glaring errors" that assume construction costs will continue to go up, not down, he insists.

Regional staff and politicians dismiss those claims, saying that only the actual tendered costs are ever charged.

"The lack of accountability and transparency is appalling," says Gilgan, who wrote a letter to potential buyers urging them to complain about how the increase will hike the cost of a new home.

But in Halton, where green-leaning politicians considered freezing growth altogether last year in an effort to push the province and the industry toward coughing up more infrastructure funding, such complaints fall on deaf ears.

Emboldened by major victories against developers at the Ontario Municipal Board over the amount of green space that must be preserved in north Oakville when the homebuilders move in, they say they will not give in to complaints like Gilgan's.

The Halton debate has huge implications because south Milton and north Oakville, still nearly entirely rural, are poised for major growth, with more than 75,000 residents expected to move in by 2021.

Oakville councillors Allan Elgar and Tom Adams say they won't apologize for high development charges because that's simply the cost of doing business in the town.

"We don't want to subsidize the development industry any more than we have to," says Elgar.

Such blunt talk reflects pent-up anger over decisions made more than a decade ago.

In 1997, the Mike Harris Conservatives changed the law, reducing to 90 per cent the share developers were required to pay toward services such as parks, recreation centres and libraries in new communities.

Developers were also exempted from contributing to the community portion of new hospitals, which property taxes help cover today. (They are still expected to pay 100 per cent of the cost of new roads, water and waste-water pipes and plants.)

Municipal officials contend that since that change was made, property-tax payers have increasingly been saddled with costs that should rightly be borne by developers and new homebuyers.

What's rankling the industry today is Halton politicians' willingness to use every available tool in their belt, including a clause in the region's Official Plan that allows water and sewer connections to new homes to be withheld until an acceptable financing plan for new infrastructure is in place.

Other GTA regions – York Region, notably – have built infrastructure at the front end, hoping to recover costs from developers later. Halton requires them to pay up front.

All of this has led the Building, Industry and Land Development Association, the industry lobbying group, to complain that such charges "will have far-reaching effects across the Greater Toronto Area."

ANDREW WALLACE / TORONTO STAR Order this photoHalton regional chair Gary Carr, at a Mattamy Homes site in Milton, says developers should pay up for services. (June 26, 2009)